I would agree with this however DKC is a 2d platformer and DK64 is a 3d platformer. DKCR is closer to DKC for that reason. Mario Galaxy is a different when compared to New Super Mario Bros. What they want is for Retro to attempt to bring DK back to 3D platforming.

Hang on a minute - how does the fact this was developed by Rare affect its release? We already have Rare games on the Virtual Console (complete with logo) so that's surely not the issue. Also what's with this jetpack thing? Isn't the jetpack in Donkey Kong Country Returns and Smash Bros Brawl for a start? It's a stupid thing to lay claim to anyway - I think all this is just speculation. Nintendo own the Donkey Kong rights and games and it simply hasn't appeared for the same reason other Nintendo games are yet to appear: they just haven't.

We already have Rare games on the Virtual Console (complete with logo) so that's surely not the issue.

Releasing this game on the VC is no different to them releasing Killer Instinct or Banjo-Kazooie on the VC. Which you should know that they can't do due to their agreement with Microsoft. Nintendo owns 95% of Donkey Kong 64 but this small game that is Rare's property is significant and cannot just be overlooked. Plus its not like they would just remove Jetpac; they don't like to alter their games other than cosmetically when necessary.

So what about the Donkey Kong arcade? Isn't that an issue too? And it's superior to the VC version to have the missing level.

Nintendo owns the arcade version of Donkey Kong so its not the same issue. All the issue is here is yes Nintendo may not want it to steal downloads away from the NES game or the actual arcade game if it ever gets released.